December 8, 2017 · 2:17 pm

The Food Business Isn’t Just Food

It’s Foodie Friday and the topic today is business. I know: that’s pretty much the topic every day, but let me explain. I read an article on one of the restaurant sites I frequent that spurred a thought that goes beyond the restaurant business.

Photo by Helloquence

The piece was all about the financial statistics a good restaurateur needs to watch. I’m always surprised when a place with good food in a great location goes out of business but it seems to happen a lot. Sometimes it’s that the chef leaves and things slide downhill but more often than not it’s because the business part of the food business overtakes the food part of the food business.

One needs only to watch an episode or two of the show Restaurant Startup to see how a food business is not especially different from any other startup. I assume what I’m seeing on the show reflects the new restaurant world at large and today’s article confirms that belief. Many of the contestants have no clue about the first, and maybe the most important statistics any startup needs to grasp: Cost Of Goods Sold. In a restaurant, that’s food. In a service business, we usually call it cost of sales. In either case, it’s the cost of producing whatever it is you’re selling. You’d be surprised how many businesses don’t know this number.

That number is part of a bigger one called overhead, which includes rent, salaries, services such as accounting and legal, and things like keeping the bathroom clean (your restaurant has one; hopefully, so does your office). These numbers are critical because if you charge too little for what you provide you won’t be in business very long, and you can’t figure that out unless you know your monthly nut.

Once you have the Gross Profit (or Gross Income) number, you can subtract your expenses to get Net Income or Net Profit. Divide that by your sales and suddenly you have a profit margin. That’s something you can use to benchmark your results against other businesses of the same type. In the restaurant business, it’s generally not very big, which is all the more reason why a complete grasp of the numbers is critical. There isn’t a lot of room for error.

I spend a lot of time with my clients on their numbers. It’s not just so that they can present themselves well to potential investors either. Like your web traffic or any other piece of data, they can illuminate a lot and help you make critical decisions. Ignore them at your own peril.

By the way, I’m writing this as a sort of thank you to my late brother who was my CPA and who beat accounting into me many years ago. He passed 5 years ago next week and I miss his guidance and the clicking of his calculator every day.

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December 6, 2017 · 12:57 pm

Getting Permission

Some of you send me social media love for or comment about the little photos I generally include with each blog post. Once in a while, you ask about where I get them. That actually prompted a thought in my mind that probably applies to whatever digital presence your business has.

First, let me answer the question. I source my photos from a few sites that offer royalty-free images that are donated by photographers, illustrators, and artists under a Creative Commons license. My two primary sources are Pixabay.com and Unsplash.com, and I highly recommend either or both to you.

Second, the question this raises for me is how many of you are aware that not every image you find via a search is OK to use? More importantly, how many of you realize that not every piece of content a user posts on their social sites or on your site is content that you have permission to use for commercial purposes? If and when you do an image search, you need to filter the results by “usage rights”, located under “Tools” on Google, for example.

I’m sure each of you read the “Terms of Use” for every site you use or every social service. Who doesn’t love a good 20-page legal document? OK, not so much, but contained in that document is some clause that might allow a service (Facebook, Instagram) to use what you post on the service for their own purposes, but that doesn’t mean that you can use something a consumer posts publicly on those services. It also means, even though you do have some permission from the user, that the user may not actually have the rights to give you if, say, they photograph your product along with several other legally-protected things or in a commercial environment (think theme park, store, etc.). If I post something you created that infringes on a third-party’s rights, I”m just as screwed as you are should they come after you.

The thing to remember is that just because something is posted in public doesn’t mean it’s free for anyone to use. Not photos, not videos, and not even reviews. You need to get permission from the creator as well as from anyone or the owner of anything in the piece of content. Overkill? Maybe, but better safe than sorry as my lawyer friends remind me. In a time when content is everywhere and being created by everyone, so too are the potential problems with using it.

BIG LOUD NOTE: This isn’t legal advice since I’m not a lawyer. I don’t even play one on TV. However, I did spend a lot of years going after people who used copyrighted content without permission. Trust me: you don’t want to be on the receiving end of that situation. Heard?

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December 4, 2017 · 12:41 pm

Losing The Lottery

We’re all bugged. If you carry a smartphone, you may rest assured that it’s possible to identify that device as it moves through the world and interacts with various services. How difficult do you think it is, once someone has a device ID, to associate it with a phone number‘s owner?

I think none of that is a surprise to you, nor is it to me. I try to keep the list of organizations tracking me to a minimum and to a list of companies I trust. Unfortunately, that takes more effort that most people are willing to exert but it can affect you in more ways that you might know.

I uninstalled a lottery app this morning. It was doing a number of things that caused me concern. First, it alone was responsible for 65% of the data traffic from my phone when the phone was idle. The app was idle too, or so I thought. In fact, it was busy sending my phone number, my device ID, and several other very personal pieces of data (Facebook and Twitter ID’s among them) to…someplace. Who knows what happened to the data from there.

I installed this app a few months ago when the Powerball prize pool was ridiculously large. It seemed like a convenient way to input my tickets and get notified if I won anything. What I won, apparently, was the ability to be tracked as an individual and have my battery drained unnecessarily. Buh bye.

What’s the point today? I guess it’s a message for you as you’re on either side of the desk. As a marketer, we can’t violate our customers’ trust by using the permissions they give us to collect usage data and selling or sharing that data to companies with which the customer has no relationship. More than 70 percent of smartphone apps are reporting personal data to third-party tracking companies like Google Analytics, the Facebook Graph API or Crashlytics. Generally, those companies are there to improve the user experience. The problem is that in many cases, app developers that that permission as carte blanche to send the data anywhere. I’ve seen how that data can be used for profiling and targeting and believe me, it’s frightening.

As consumers, we need to pay more attention to privacy and where our data goes. It’s not just to keep your battery from running down. Given the role that our smart devices play in our daily lives, it’s quite possible that a bad actor could know way more about you than you’d care to share. I don’t just mean by monitoring your texts or any unencrypted data you send. It’s also tracking your movements. As a positive, location-based services can help us (you get an alert for a sale at a store you frequent as you pass within a quarter mile) but the possibility of an unscrupulous third party misusing that data is exceptionally high. Check your app permissions. Why would a game need to know your location or have access to your camera, for example? Turn off the permissions that don’t make sense.

I’ll be looking up the results of the money I risked on Powerball some other way since trying to make my life a little easier made it a lot more risky in other ways. It was a good reminder to let my devices work for me and not for people who want to spy on me. You with me?

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